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With Real Estate Commission Rules Changing, Should I Wait to Buy a House?

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“I want to buy a house soon, but I read that real estate commissions are going down. Should I wait until the new rules are in place?”

You’re right to step back and re-strategize your home purchase after the National Association of Realtors’ recent legal settlement. If it’s approved by the court, the real-estate industry is on the precipice of change that could impact the home buying process and what you pay for it. Whether it’s best to act now or to wait, though, will depend on your budget, how much work you want to put into the process and your need for certainty.

Here’s the gist of what’s happening: Lawsuits were filed against NAR, a trade group representing 1.5 million real-estate agents, questioning its cooperative-compensation rule. Under this rule, sellers cover the commissions for both their agent and the buyer’s, with the cut offered to buyer’s agents advertised in an agent-facing database known as a multiple listing service, or MLS. Critics say the practice reduces competition and inflates commissions and home prices.

In March, plaintiffs accepted a settlement proposed by NAR, which would remove offers of compensation from the MLS and require agents to sign contracts with buyers. The rules are expected to ultimately lower costs, however, buyers may need to pay agents out of pocket. If approved by the court, the changes are set to go into effect in August.

With this all in mind, there is no hard-and-fast answer as to whether you should buy now or wait until those changes roll around. There are, however, cases for both paths.

The case for buying now

If you want a full-service agent and assurance that the seller will foot the bill—then buying before July is probably best.

“The NAR settlement is creating lots of uncertainty, and if there’s anything people don’t like when making major life decisions and purchases, it’s that,” says Dana Bull, a real-estate agent and consultant in Massachusetts. “If you buy right now, you’ll have a greater sense of what to expect.”

By buying now, you’ll likely fall under the existing agent commission model where the seller pays. The total is usually 5% to 6% of the home price—with 2.5% to 3% going to each agent. In exchange for that cut, your agent will usually suggest listings, tour properties with you and negotiate on your behalf. Depending on what state you live in, they may also draw up contracts and attend your closing.

“The home buying journey will not be altered—at least for the next few months,” says Alyssa Brody, co-founder of Development Marketing Team, a real-estate brokerage with branches in New York City and Miami.

The case for waiting

If you’re comfortable negotiating and willing to handle some of the home-search process on your own, waiting to buy could pay off. “If you’re more focused on maximizing your investment and minimizing costs, waiting until the new rules come into play could be beneficial,” Brody says.

Starting in mid-August, buyers will sign a separate contract with their agent, opening the door for negotiation. Some agents may charge an hourly rate or offer a la carte services. This would allow buyers to choose which services they want to do themselves (browsing listings and touring homes, perhaps) and which they want to pay for (maybe negotiating and drawing up the contract).

Additional savings could come from lower home prices. With sellers no longer footing the bill for buyer agents, some experts believe they will sell their homes for less.

This all depends on market conditions, though, and agents broadly agree that prices are unlikely to drop much in the short-term. By summer, the Federal Reserve is expected to start cutting interest rates, which means lower mortgage rates and higher demand. “With our limited inventory, competition will be fierce,” says Bret Weinstein, founder of Guide Real Estate in Englewood, Colo.

If you choose to wait, be ready for a bumpy ride. “It will cause a shake-up, and no one knows exactly how the open market will react,” Bull says. “There will be lots of confusion, and as a buyer, you could be stuck in the crosshairs while the entire industry adjusts to the change.”

To sell or not to sell

The considerations are similar if you’re on the fence about selling. If you are comfortable with the existing model, sell now. For the lowest costs, you might want to wait until August.

Take note, though: Not everyone is convinced things will change once the new rules are in place. “I believe sellers will continue to pay buyer agents in big markets like Los Angeles, because it’s in their best interests,” says Michael Nourmand, president of real-estate firm Nourmand & Associates in Beverly Hills, Calif. “It’s best for buyer affordability, they don’t want to limit their buyer pool, and negotiating a commission is another variable that could derail the transaction.”

Talk to a few real-estate agents about the pros and cons of skipping the buyer-agent commission in your area. They can advise you on what it might mean for your sale, given current market conditions.



This article was originally published by a www.wsj.com . Read the Original article here. .

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Should I Buy A House Now Or Wait? Is It A Good Time? | Bankrate

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Key takeaways

The current housing market is causing many prospective buyers to wait for better conditions, but there’s no guarantee that it will improve considerably anytime soon.

If your credit score is strong, your employment is stable and you have enough savings to cover a down payment and closing costs, buying now might still be smart.

If your personal finances are not ideal at the moment, or if home values in your area are on the decline, it might be better to wait.

Buy now, or wait? That’s the question prospective homeowners have been struggling to answer in today’s housing market. Home prices have been skyrocketing recently, and the Federal Reserve’s work to tame inflation sent mortgage rates soaring, too.

The combination has led many would-be buyers to pick the “wait” side of the equation. The median sale price of an existing home in the U.S. hit its second all-time-high of the year in June 2024 — an astonishing $426,900 — according to the National Association of Realtors (NAR). And, according to the Fannie Mae Home Purchase Sentiment Index released in July 2024, 81 percent of consumers believe it’s a bad time to buy a house.

However, after being at a constant disadvantage for the past few years, things have actually started to look a bit better for buyers in some respects. For example, days-on-market figures are up, giving buyers more time to make an informed decision. NAR data shows that homes typically spent 22 days on the market before selling in June, up from 18 days a year ago. And available housing inventory, while still on the low side, is rising — up a healthy 23.4 percent year-over-year, per NAR.

June’s National Housing Report from RE/MAX, one of the biggest real estate brokerages in the country, also reported a sharp uptick in new listings, up 38.1 percent from June 2023. “It’s good to see inventory levels rising, as more listings represent more options for buyers,” said RE/MAX president Amy Lessinger in the report. However, she continued, “it’s evident that buyers are sensitive to interest rates, highlighting the need for lower rates to stimulate significant growth in market activity.”

So, is it a good time to buy a home? Or is it better to wait on the sidelines, in the hopes that either prices or rates see a significant drop soon? And are there still concerns about a possible recession? Here are some key considerations to help determine the way forward.

Is now a good time to buy a house?

Mortgage rates have backed off from the 8 percent highs hit in October, but they’re still close to 7 percent. And home prices are sky-high as well: June data showed the highest median price NAR has ever recorded, reflecting 12 consecutive months of year-over-year increases. Together, these factors might dissuade you from buying right now, and that’s understandable.

No matter which way the real estate market is leaning, though, buying now means you can start building equity immediately. It also means avoiding the potential for additional mortgage rate increases later: Rising rates can spell serious trouble for your monthly budget, and they also result in paying more in interest over the life of the loan.

“If a buyer finds a property they would like to call home, they should not delay,” says Stacey Froelich, a broker with Compass in New York City. “You cannot time the market, and a home should be a long-term investment.”

“Remember, you ‘marry the house and date the rate,’” Melissa Cohn, regional vice president of William Raveis Mortgage in Connecticut, recently told her newsletter subscribers.  To put it another way, if you find the right place, buy now — you can always refinance later.

In general, if you can answer yes to these three questions, now is a good time to buy.

Do you have excellent credit? Anytime you’re borrowing money, start by checking your credit score. The best deals on mortgages will be available to those with the best scores — in fact, the median credit score for mortgage borrowers in the first quarter of 2024 was a very high 770, according to the Federal Reserve Bank of New York. If you have demonstrated that you are a low-risk borrower with a history of on-time payments, you’ll be in line for the lowest mortgage rates a lender offers.

Have you saved enough for a down payment? In addition to paying your bills on time, you should be sitting on a sizable chunk of change for a down payment. The more you can pay upfront, the less you’ll have to borrow (and so the less interest you’ll have to pay). Make sure you’ll have plenty left over, too: Lenders like to see additional cash reserves that can provide a cushion if something unexpected happens.

Are you planning to stay in the home for a while? Beyond the purchase price, buying a home comes with closing costs that can run thousands more. So, to justify those one-time transaction costs, it’s wise to be reasonably certain that you won’t move again anytime soon — or that you’ll be financially stable enough to hold on to the property and rent it out. Selling a home very soon after buying can have serious tax implications.

Should I buy a house now or wait?

Ultimately, the decision of when to buy a home is up to you. Life goes on, whether the timing is perfect or not. If you’re anxious to become a homeowner, you’ve met the criteria above and you’re financially stable, go ahead and start house-hunting.

If you’re holding out for lower mortgage rates, a bit of patience might be in order. They have been volatile lately, topping 8 percent in October 2023 before falling back below 7 percent, then rising back above it, and lately just a hair under 7 percent again. That’s more than a full percentage point swing in just a few months.

While 1 percent might not sound like much, it can make a big difference in how much house you can afford over the long run. For example, Bankrate’s mortgage calculator shows that if you buy a $350,000 home with a 20 percent down payment, the monthly payment for principal and interest on a 30-year loan with a 7 percent interest rate is $1,862. The same loan at 8 percent brings those monthly payments up to $2,054 — $192 higher every month. That’s more than $2,300 each year, or $69,000 over the life of the loan.

Of course, it’s impossible to predict where rates will land eventually. But here are three instances in which it might make more sense to wait out the market for at least a while:

If home values in your area are dropping: The country’s overall median home price may have hit a record high in June, but some individual areas have still seen price declines. Take Austin, Texas, for example: Redfin data shows that the median price in Austin in June 2022 was $616,444. A year later, that figure was down to $600,000 even, and by June 2024, it had fallen to $564,000. Such declines may not be done yet, so it could pay to be patient for a bit longer.

If inventory in your area is increasing: When there are more properties on the market to choose from, buyers enjoy more bargaining power. Since many buyers have been sitting on the sidelines due to the interest rate environment, many areas have seen a jump in inventory. Even so, according to NAR, the country overall had 4.1 months worth of housing supply in June — an improvement over recent months, but still too low to meet demand.

If your personal finances could use some love: The biggest reason to wait is if your current financial situation is not ideal. For example, if you are expecting a sizable commission check or bonus, an inheritance or some other windfall that would make a big difference in your down payment, waiting until it arrives makes sense. And if your credit score is low, waiting is also smart. Take some time to improve your credit and pay down your debt so you can qualify for better loan terms.

Analyze your local market carefully

Deciding whether to buy a house now or wait depends a lot on where you want to call home. Regardless of national headlines, real estate is a local game and can vary greatly from one market to another, even within the same state.

Consider this June Redfin data from North Carolina’s Research Triangle cities of Raleigh and Chapel Hill, only about 30 miles away from each other: Raleigh homes cost a median of $450,000 and spend about 16 days on the market before selling. But in nearby Chapel Hill, the median home costs a much higher $667,500 and sells in less than half the time (just 6 days). That’s a notable difference.

In today’s homebuying market, it’s more important than ever to find a real estate agent who really knows your local area — down to your specific neighborhood — and can help you successfully navigate its unique quirks.

What if there’s a recession?

The odds of a recession within the next 12 months now stand at 32 percent, according to Bankrate’s most recent survey. And as you might imagine, recessions are a risky time to buy a home. If you lose your job, for example, a lender will be much less likely to approve your loan application.

Even if a recession doesn’t affect you directly, if your area is hard-hit, that could have a serious effect on the local real estate market. Fewer people with the means to buy means a lower chance of homes selling, which could keep homeowners from listing and decrease your options as a buyer.

There are some potential upsides to buying a home during a recession, though, if you’re financially able to do so. Notably, there will be less competition, which could help you find a great property that you otherwise couldn’t.

Next steps

Trying to buy a house right now might feel overwhelming, but waiting too long can present challenges as well. Review your finances in detail, and think about how much you’re able to pay upfront as a down payment. Be sure to take the pulse of the town in which you’re hoping to live. Then, talk with an experienced local real estate agent to figure out whether you should buy now or wait until the market is a bit more friendly to your bank account.

FAQs

Is now a good time to buy a house?

We’re in a volatile time for real estate. Prices are at record highs, mortgage rates reached 20-year highs last year, and some economic experts still believe we are heading for a recession. A high-interest-rate climate gives you less buying power, so buyers who opt to wait for lower rates may find themselves able to afford a higher-priced house, due to the lower mortgage payments. But there’s no guarantee that rates will actually go down. Ultimately, whether it’s a good time to buy depends on your personal circumstances. If you need to move now, then go for it: Shop around for the best deal possible, and remember, you can always refinance down the line if rates do decrease.

Can I buy and sell a house at the same time?

Yes — lots of people buy a new house while selling their old one at the same time. However, it does create some additional challenges, especially if you’re showing your home while still living in it. It’s important to work with an expert real estate agent who can help you find the right buyer and the right listings to look at. You’ll also want to stay close with your loan officer, to make sure the complexities of putting the proceeds from your sale toward your new down payment are as smooth as possible.

Is the housing market going to crash?

Housing experts do not think so. While there is certainly some economic uncertainty swirling right now, most experts believe that the housing market will not crash. Home prices may decline in some areas, but it won’t be catastrophic — think of it as more of a soft landing.



This article was originally published by a www.bankrate.com . Read the Original article here. .

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Should I Wait Till August to Sell My Home to Save on Commission? – NerdWallet

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If you sell your home after the middle of August, cheers: You could end up pocketing the money that previously would have gone to the buyer’s agent.

But before you celebrate, consider the downside of waiting until late summer to list your home for sale: House prices tend to fall after August. The price drop might surpass the money you save on commission.

New policies governing real estate commissions are set to go into effect Aug. 17 as a result of the settlement of an antitrust lawsuit. The amended policies give home sellers more room to negotiate what to do about the buyer’s commission — whether they want to use it to induce competitive bids or keep it to themselves entirely.

The choices complicate this season more than usual, for both buyers and sellers. Here’s what to know to help you and your agent come up with the best strategy for you.

What, exactly, is changing?

Starting Aug. 17, sellers will no longer set the commissions for real estate agents who represent buyers. Buyers will decide how much their agents will be paid. Even when sellers are willing to pay some or all of the commission for the buyer’s agent, the amount will no longer appear on the multiple listing service.

For decades, and up to Aug. 17, MLS listings have been required to advertise how much commission the seller is offering to buyer’s agents. The information wasn’t visible to home buyers but could be viewed in agent-only fields of the MLS.

When sellers set commissions for buyer’s agents, they’re sometimes advised that offering a low commission will attract fewer buyer’s agents — and therefore fewer competing offers. The plaintiffs in the antitrust suit argued that the policy of requiring commission info on the MLS was designed to discourage them from negotiating lower commissions for buyer’s agents.

Can sellers start offering 0% to buyer’s agents today?

Technically, sellers have always had the option of offering zero or minimal commission to the buyer’s agent. But most sellers have offered such commissions to motivate buyer’s agents.

The money may come directly out of the seller’s pocket, as has been the norm.

The money may come directly out of the buyer’s pocket.

The buyer and seller may split the payment.

The buyer may pay indirectly, by adding their agent’s commission to the price of the house when they make an offer.

Here’s an example of how an indirect payment might work for a buyer who is paying a 3% commission. The buyer finds a house costing $400,000. The 3% commission is $12,000. The buyer offers $412,000 and asks the seller to transfer $12,000 to the buyer’s agent at closing.

Keep in mind that sellers, having equity, tend to have more access to cash than first-time home buyers, who accounted for 33% of buyers in April. A seller who’s willing to pay all or some of the buyer’s commission may end up with more offers, and a higher final price, than one who flatly takes that commission off the table.

How much money could sellers keep, though?

As a home seller, you stand to save thousands of dollars on commissions if the buyer pays their agent directly or indirectly.

Let’s say the agents in your town typically collect 2.5% on each side of the transaction, and you sell your house for $400,000. Each agent earns $10,000. If you pay both agents, you’ll shell out $20,000 and end up with $380,000.

But if the buyer pays their agent, you would pay your agent $10,000 and walk away with $390,000. That’s $10,000 more.

On the other hand, buyers might request bigger closing cost credits, subtracting from the seller’s bottom line, Chuck Vander Stelt, a real estate agent in Valparaiso, Indiana, said in an email. Or buyers might offer less because they will bear the expense of paying their own agents.

Even after Aug. 17, sellers might keep offering commissions to buyer’s agents as motivation, Vander Stelt added. These offers could remain standard in many markets, multiple agents said. Offering commissions to buyer’s agents will still be permissible under the new policies, but those offers will no longer appear on the MLS. Listing agents can communicate the information on brokerage websites, or in phone calls, emails and texts.

What would be the cost of waiting?

You might be tempted to keep your home off the market until the new policy goes into effect. But waiting might not be a wise move, because it would mean sitting out homebuying season.

Home prices peak from May through August, then drop off. In 2023, the median existing home cost $410,100 in June, $405,600 in July, $404,200 in August — and $392,700 in September, according to the National Association of Realtors. If you list your house after mid-August, you probably won’t close until October or later, when prices are even lower.

With house prices peaking in summer, you might come out ahead by selling during the busiest time of the year, even if you end up paying the buyer’s agent’s commission.

“I don’t really have anybody holding off until after August to list their house because they want to save a couple bucks,” says Michelle Doherty, an agent in northern Virginia with RLAH Real Estate. She says her clients will be ready to sell in June or July, “depending on how things progress with prepping the house.”

Can I negotiate the listing agent’s commission too?

You might save money if you don’t pay the buyer’s agent’s commission. But what about the commission that you pay the listing agent for selling your home? You might not see an immediate reduction. If a cut in commissions from 3% to 2% is your hope, you’ll probably mope.

“First of all, nothing’s going to change quickly, OK?” says Stephen Brobeck, senior fellow for the Consumer Federation of America. “The industry will resist, and consumers don’t really focus on this much.”

Vander Stelt said that he sees headlines that proclaim “the end of the 6% commission.” That’s a mistaken belief, he said. “Overall, the average commission costs per transaction on a percentage is likely to come down over the coming years,” he said. But not instantly.

What if I list before Aug. 17 but sell after?

Months can pass between the day you put your home on the market and the day you hand over the house keys at closing. What if the Aug. 17 policy change happens in the middle of this period? The National Association of Realtors provides guidance for two scenarios:

Your home’s MLS listing offers to pay the buyer’s agent’s commission, and you sign the contract accepting the purchase offer before Aug. 17: You’ll pay the commission, even if the closing occurs on Aug. 17 or after.

Your home’s MLS listing offers to pay the buyer’s agent’s commission. But in accordance with the new policy, that offer is removed from the MLS on Aug. 17. Sometime after that date, you accept the purchase offer: That defunct commission offer on the MLS is no longer valid. You and the buyer will negotiate how to take care of the buyer’s agent’s commission.

When you put up your home for sale, you’ll sign a listing agreement with your agent. NAR says that listing agreement might have to be amended if it says that an offer to pay the buyer’s agent must be made “on the MLS.” As of Aug. 17, that clause in the listing agreement will conflict with the new policy. Your agent might ask you to sign an amended listing agreement before that date.



This article was originally published by a www.nerdwallet.com . Read the Original article here. .

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Should you sell your home now or wait for the Realtor settlement this summer? | CNN Business

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New York
CNN
 — 

Listing your home in the spring used to be a no-brainer. But a major real estate shakeup is complicating the equation.

That shakeup is coming from a $418 million settlement the National Association of Realtors announced last week with groups of homesellers that could go into effect as early as July. The settlement will eliminate the long-standing standard 6% commission paid by the seller, which could ultimately make it cheaper to sell your home post-settlement.

But is it worth waiting to list your home and potentially risking a sale?

Would you rather be unloading boxes from a moving truck in a potential snowstorm or heatwave as opposed to when it’s a pleasant 60-degree day?

That’s one of the main reasons spring has been the most popular season to buy a home.

For families with children, it’s also an ideal time to close on home because it would allow them to stay in the same school.

By springtime, people are also more likely to have paid off any debt they took on over the holidays, said Phil Crescenzo Jr., the southeast division vice president at Nation One Mortgage Corporation.

The settlement could present a major downside to homebuyers.

Under the current system, the buyer’s agent’s commission is baked into the total they pay for a home. That meant buyers could pay that added cost over the entire length of their mortgage.

But after the settlement is finalized, many may have to pay flat fees upfront to agents. That would add to the financial burden for homebuyers – especially first-timers. And that’s on top of coming up with all the money they need for a home downpayment, closing costs, a lawyer and all the other fees associated with buying a home.

Buyers, therefore, may have more of an incentive to close on a home sooner rather than later.

There’s also no guarantee a federal court will sign off on the settlement as is. The unknowns associated with that are enough of a reason not to wait to list your home, said Crescenzo. From conversations he’s had with real estate agents, he said he’s not seeing any signs that the NAR settlement is delaying listing activity.

“There is no reason to wait,” Mike Downer, a broker associate with Coldwell Banker Realty in Naples, Florida. “The seller does not currently need to provide any compensation to the buyer’s agent.”

The biggest advantage of waiting to list your home until the settlement is finalized is being able to negotiate an agent’s commission down more than they otherwise would’ve been able to. On top of that, they may be able to avoid having to pay the buyer’s agent’s commission.

That could allow them to pocket thousands of dollars more on the sale of their home.

If selling your home boiled down to a business decision, Mike Downer, a broker associate with Coldwell Banker Realty in Naples, Florida, said he’d try to list it as soon as possible.

“If I am trying to test the market, there would be no need to list it 1723291007,” he added.

But in his view, the NAR settlement shouldn’t be a major consideration when it comes to timing.

“An agent who provides value will always be worth more than an agent who does not provide value,” because they can help you net more money for the sale of your home, he said.



This article was originally published by a www.cnn.com . Read the Original article here. .

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Is It a Good Time to Sell a House or Should I Wait in 2024?

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Selling a house is a big decision that requires careful consideration, especially in today’s uncertain economic climate. Given the dramatic rise in mortgage rates over the past year, this is a question on the minds of many sellers who are considering selling their homes.

The latest survey reveals that the percentage of respondents who believe it is a good time to sell a house has increased while those considering it a bad time to sell have decreased. Let’s take a closer look at the factors that can influence whether it’s a good time to sell your house.

Is It a Good Time to Sell a House in 2024?

So, let’s unpack the current trends to see if selling your house right now is a smart move for you.

Sellers Hold the Cards (For Now)

There’s a clear trend emerging: sellers are currently in a sweet spot. The Fannie Mae Home Purchase Sentiment Index® indicates a significant 67% of consumers believe it’s a good time to sell a house. That’s a substantial increase since the end of 2023, even though mortgage rates have been steadily climbing.

This suggests two key things. First, there are plenty of potential buyers out there, fueled by factors like job security and continued income growth (though at a slower pace). Second, with a limited number of houses available on the market, sellers have the upper hand in negotiations.

So, if you’ve been considering selling, this could be a golden opportunity to get top dollar for your property. Here’s the thing: while bidding wars may not be as common as they once were, a well-maintained house in a desirable location is likely to attract multiple offers, giving you the leverage to negotiate a favorable sale price.

A Market with Nuances

However, the market isn’t without its complexities. While home prices are expected to continue rising, the pace of that increase is likely to slow down compared to the rapid acceleration seen in recent years. Additionally, mortgage rates have been on the rise, making affordability a challenge for some buyers. This means that while there are still plenty of buyers out there, they may be more cautious about overspending. As a seller, this translates to the need to price your house competitively to attract serious offers. Don’t expect bidding wars to be the norm anymore.

Making a Strategic Decision

So, should you sell your house now? The answer depends on your individual circumstances. Here are some factors to consider that go beyond national trends:

Your Timeline: Are you flexible on your move-out date? If you can afford to wait, you might benefit from a period of mortgage rate stabilization. But if you have a pressing need to sell, the current market conditions could still be favorable.
Local Market Dynamics: National trends provide a helpful backdrop, but your local market can be quite different. Research what’s happening in your area to get a better understanding of buyer demand and listing prices. Talk to a local real estate agent to get a feel for the specific inventory levels and competition you’ll face.
Your Financial Picture: Are you carrying a high mortgage balance? If so, selling now could help you free up some cash and potentially reduce your monthly housing costs. However, factor in any selling costs and potential moving expenses to ensure the sale makes financial sense for you.

Beyond the Data: Considering the Human Factor

Remember, the decision to sell your house is also a personal one. Consider your emotional attachment to the property and how ready you are for a change. If you’re unsure, don’t feel pressured to jump on the bandwagon.

The Takeaway

The housing market is constantly evolving, but right now, the data suggests that sellers have the upper hand. If you’ve been thinking about selling your house, there’s no reason to wait. However, carefully consider your individual needs and the state of your local market before making a final decision. Consulting with a qualified real estate agent who is familiar with your area can be a valuable step to ensure you get the most out of your sale. They can help you with pricing strategies, navigating negotiations, and ensuring a smooth transaction.

Source: Fannie Mae
Should I Sell My House Now or Wait?

So, the question remains, should you sell your house in 2024 or wait until 2025? The answer is not straightforward, as it depends on a number of factors specific to your personal situation. Some of the key considerations are discussed below. Selling a house is a major decision that requires careful consideration of various factors, including market conditions, personal circumstances, and financial goals.

Assess Current Market Conditions

The first step in deciding whether to sell your house now or wait is to evaluate the current state of the real estate market in your area. Consider the following:

Local Housing Market: Research recent sales data for homes similar to yours in your neighborhood. Are properties selling quickly or languishing on the market? A seller’s market, characterized by high demand and low inventory, might be favorable for selling now.
Home Prices: Monitor trends in home prices in your area. If prices have been steadily increasing, it could be an advantageous time to sell.
Interest Rates: Keep an eye on mortgage interest rates. Lower rates might attract more buyers to the market, potentially leading to a quicker sale.

Evaluate Your Financial Goals

Your personal financial goals and needs play a significant role in the decision-making process:

Profit Margin: Consider how much equity you have in your current home. If you’ve built substantial equity and can sell at a profit, it might be a good time to capitalize on your investment.
Downsizing or Upsizing: Are you planning to downsize or upsize? Your plans for your next home can influence the timing of your sale. If you’re downsizing, the current market conditions might align well with your goals.

Life Circumstances

Your personal circumstances should also be factored in:

Job Relocation: If you’re moving for a new job or career opportunity, the timing of your move might be determined by external factors.
Family Changes: Life events like marriage, divorce, or growing families can impact your housing needs. Consider how your changing family circumstances play into your decision.

Market Trends and Projections

While it’s impossible to predict the future with certainty, researching market trends and projections can provide insights into potential market shifts. Consult with real estate professionals who can offer expert opinions on where the market might be headed.

Real estate professionals, including real estate agents and financial advisors, can offer invaluable guidance. An experienced real estate agent can provide a Comparative Market Analysis (CMA) to help you understand your home’s value in the current market. Financial advisors can help you evaluate the financial implications of selling now versus waiting.

Examining the current housing market trends and data provided by Realtor.com, it’s essential to evaluate whether it’s an opportune moment to sell a house or if waiting might be a strategic move. Let’s delve into the key findings to make an informed decision:

Current Market Trends

The past week’s housing trends offer insights into the dynamics at play. Mortgage rates, which had been steadily increasing for five weeks, finally stabilized but remained above 7%. This stability, however, did little to boost seller confidence, as high mortgage rates have dampened enthusiasm among sellers in recent years.

Buyers, on the other hand, are facing a competitive market characterized by higher down payments compared to previous years. This trend is likely driven by increased competition over limited inventory and buyers with more disposable income, either from recent home sales or higher earnings.

Furthermore, the Consumer Price Index (CPI) inflation data showed improvement, indicating progress in the economic landscape. This positive development can potentially influence mortgage rates in the near future, offering hope for both buyers and sellers.

Key Findings

The median listing price: It remained steady year-over-year for the second consecutive week. Despite this stability, the median listing price per square foot was 3.8% higher than the previous year, suggesting a shift in the types of homes available on the market.
New listings: There was a 6.6% increase compared to one year ago. While seller activity has been on the rise, the rate of growth slowed down, indicating a potential slowdown in new listings.
Active inventory: Homes listed for sale were 35.0% higher than the previous year, giving buyers more options. This abundance of inventory varies geographically, with the South experiencing the highest growth.
Days on the market: Homes spent one day more on the market compared to the previous year. Despite this slight increase, homes continue to sell relatively quickly, driven by competition among buyers.

Given the current market conditions, the decision to sell your house hinges on various factors, including your financial situation, housing needs, and long-term goals. While high mortgage rates may deter some sellers, improving economic indicators offer hope for a more favorable market environment in the future.

If you’re considering selling, it’s essential to weigh the pros and cons carefully. Selling now could mean facing less competition from other sellers, but waiting might allow you to capitalize on potentially lower mortgage rates and increased buyer demand.

Ultimately, the right timing depends on your individual circumstances and risk tolerance. Consulting with a real estate professional can provide valuable insights tailored to your specific situation, helping you make a well-informed decision.

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Should I Sell My House Now Or Wait? A Guide | Bankrate

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Key takeaways

Late spring and early summer are generally considered the best times to sell a house.

Traditionally, low mortgage rates and short supply make it a good time to sell.

While today’s rates are relatively high, low inventory is still keeping sellers in the driver’s seat in most markets.

If you’re considering selling your home, it’s critical to understand the current real estate market dynamics. The volatility that dominated the market amid pandemic-related pressures may have eased, but there are still serious challenges.

For one thing, mortgage interest rates shot up recently, reaching highs not seen in more than 20 years. While they have backed down from the 8 percent threshold seen in October 2023, Bankrate’s weekly survey of large national lenders shows that, as of late May, the average 30-year fixed mortgage rate was 7.17 percent. That still-high reality makes mortgage payments more expensive and is driving more than a few potential buyers to the sidelines — certainly not ideal if you’re on the selling side of the equation.

Complicating things further, home prices are very high as well. April 2024’s nationwide median sale price was $407,600, a record high for the month of April and very close to the National Association of Realtors’ highest-ever monthly median of $413,800, recorded in June 2022. While high prices are typically good news for sellers, they obviously require buyers who can afford the purchase, and the high interest rates are making that harder. Regardless of pricing trends, though, with housing inventory still at a low 3.5-month supply, the nation overall is still solidly a seller’s market.

However, if you were wary of a home sale last year, that may have been wise. ATTOM Data Solutions’ 2023 U.S. Home Sales Report shows that, while prices did rise throughout last year, they did so at the slowest pace in more than a decade.

So, amid all these mixed signals, is now a good time to sell your house? Here are some insights to help you sort through the question.

Should I sell my house now?

There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market. If popular opinion is any guide, now may still be a good time to sell despite the evolving market. According to Fannie Mae’s April 2024 Home Purchase Sentiment Index, about two-thirds of respondents — 67 percent — feel it is a good time to sell.

Local market dynamics also play a large part in whether it’s a good or bad time to sell, says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida, and author of “The Brilliant Home Buyer.” Some markets may be riding high, while others remain sluggish. “In some areas, selling now is the right thing to do because prices are still climbing,” Severance says. “In other markets, it might be best to wait to sell until interest rates come down and stay down, which will spur sales once again.”

When is a good time to sell a house?

Historically, spring and summer are usually the best times of year to sell a house. But beyond seasonality, there are many factors that might make selling your home a wise decision. Often the reasons are based on financial calculations, cost of living expenses and other considerations, but there may also be other factors that make selling your home the right choice. These include:

If rates are low
This is not the case currently, but low interest rates entice more prospective buyers to enter the market, which is advantageous for sellers. An increased number of buyers shopping for homes often leads to bidding wars and drives up home prices, meaning you can likely sell your home for a solid profit.

If supply is short
A shortage of housing inventory — which is the case currently — also drives up demand and prices for available homes. What’s more, when housing supply is low, homes on the market tend to sell faster.

If you’re ready to downsize
Downsizing may be a more budget-friendly choice than continuing to maintain a larger, costlier home. For older homeowners, downsizing may even be a necessity: “If you can’t handle the stairs anymore, or if there are more repairs than you can manage, it may be a good time to sell,” says Rick Albert, a broker and director of business development for Lamerica Real Estate in Los Angeles.

If you need to relocate
If you’re relocating to a new state for a job or want to enjoy your retirement in a new area, and you need the profits from the sale to put toward your next place, selling may be unavoidable. “The time to sell is when you need to sell,” says Severance. “It’s a no-brainer to sell if you have somewhere to go.”

When is a good time to wait?

Here are some common factors that might make prospective sellers hold off on listing their home for sale:

If rates are rising
Rising mortgage interest rates often mean a smaller pool of buyers who can afford the price you want. Selling a home isn’t free, so if you can’t maximize your price, you might want to wait.

If you’ve recently refinanced
If you recently refinanced your mortgage, it may not make financial sense to sell just yet. You may actually lose money by doing so, when considering the closing costs and other fees typically paid as part of the refinancing process.

If you’re upsizing
The cost to purchase a new, bigger home may be unaffordable, particularly in a hot market. Don’t get in over your head — take the time to be sure your finances can accommodate the type of home you want. Bankrate’s home-affordability calculator can help you crunch the numbers.

If your home is in poor condition
Got a long list of repairs waiting to be completed around your home? You may want to postpone selling until some of the work can be done. It’s important to show your home in its best light in order to land the most favorable offer possible. If the home is in disrepair or there’s unfinished work, you are less likely to get a good price.

If you have no game plan
If you’re simply trying to time the market to make a profit and have no plan for after your home is sold, it may be best to wait. “It doesn’t make sense to sell if you don’t know what your next play is,” says Albert. “Where are you going? Where is that money going to be spent? If you don’t have a plan, then you shouldn’t sell.”

What about the NAR lawsuit?

There are also upcoming commission changes to consider when deciding whether to sell now or wait. New rules are set to take effect at the end of the summer as a result of a federal lawsuit settlement involving the National Association of Realtors and several large brokerages.

Longstanding tradition has held that a home seller paid the commission fees for both real estate agents in the transaction, their own and their buyer’s. But under the new rules, a buyer might be responsible for paying their own agent, which could save the seller money. However, these changes have not yet received final court approval, and waiting for them to take effect could be risky — and would mean missing out on prime selling season.

What if there’s a recession?

According to Bankrate’s most recent Economic Indicator Survey, the U.S. economy has a 33 percent chance of entering a recession by early 2025. While that is very far from a sure thing, it’s worth asking: Should you sell your house during a recession? Or even just before one?

The answer really depends on your personal circumstances. “If you’re concerned a recession is coming, it’s generally better to sell now instead of waiting,” says Jade Lee-Duffy, a San Diego–based broker. However, “selling during a recession might be beneficial if you’re looking to downsize or rent. This could cut your overall costs, and you could put the proceeds into a retirement account, go on vacation or invest.”

Remember, recessions typically bring with them job losses and general belt tightening, which can severely limit the number of house-hunters looking to buy. More buyers will be able to afford a home, and qualify for a mortgage, before a recession than after.

Tips to sell your home

If your answer to “should I sell my house now?” is yes, here are some steps you can take to get the best deal possible.

Find a good local agent: Advice and guidance from a professional real estate agent can be invaluable, particularly amid a hot or unpredictable housing market. Take the time to interview several candidates in your area, and ask friends or family members to recommend agents they’ve had a good experience with. “A Realtor can help you create a game plan to get your home organized and in shape to present it in the most favorable light,” says Jen Horner, a Realtor with Masters Utah Real Estate.

Make repairs if needed: To land the best offer for your home, know what needs fixing first. “Sellers need to understand that they only have one chance to make a first impression,” Horner says. “Your Realtor can walk the property with you and make suggestions for preparing your home to hit the market.”

Declutter and stage the interior: You should also make an effort to tidy your home, allowing prospective buyers to see the spaces clearly. “Less is always more,” she says. “The fewer items in a room, the larger it will feel. Remove any personal items and unnecessary furniture.” If tidying is not enough, consider hiring a home stager. “Staging can help show the buyer how to optimize the space.”

Add curb appeal outside: Your home’s exterior is another part of making a good first impression, and it’s worth freshening up the curb appeal before buyers see it. That can include upgrading landscaping and walkways, or even something as simple as a fresh coat of paint on the front door.

Alternative ways to sell

If you need to sell your home quickly and don’t have time for the often-lengthy process of a traditional sale, iBuyers and cash homebuying companies may be worth considering.

An iBuyer — Opendoor and Offerpad are two of the biggest — typically makes an offer on homes within 24 to 48 hours. If you accept it, the entire process can often be completed within a few weeks or less. Cash homebuyers also allow you to sell a home remarkably fast, sometimes in as little as one week, and they usually buy as-is, meaning there’s no need to make repairs at all.

Before proceeding with either method, though, it’s important to understand one major downside: While you gain speed and convenience when you sell to these companies, you sacrifice profit. They usually offer much less money for your home than you could get through a traditional sale. And iBuyers may charge steep fees as well, so be sure to read the fine print before signing anything.

Bottom line

Deciding to sell your home, whether now or later, is a major decision that requires careful consideration. Your future plans and goals should be a significant part of the equation, as well as your financial needs and the realities of the local market in your area. If you decide to proceed with listing your home, working with an experienced real estate agent who knows your community well can increase your chances of a smooth (and lucrative) sale.

FAQs

Is it a good time to sell a house?

Deciding whether to sell your house depends on your personal circumstances and the specific dynamics of the market in your area. “It depends on where you are selling,” says Katie Severance, a Florida Realtor. “Interest rates are up, causing prices in some markets to go down, and yet in other areas, prices are still climbing. It’s all geographically driven.” If you need to sell now, whether it’s a good time or not, an experienced local agent can guide you through the process.

What are the hardest months to sell a house?

Typically, spring and summer are considered the best times to sell, when there’s the most activity from buyers and the most listings entering the market. The worst times to sell are typically the dead of winter, when bad weather keeps people off the roads and holiday planning occupies their minds. December, January and February are probably the hardest months for home sellers — but activity picks up again in the spring.

Should I sell my house now, before there’s a recession?

Recessions mean belt tightening and potential layoffs. If your area is hard-hit by job losses, the number of qualified buyers will be severely limited — if you’re concerned, it might be best to sell before that (potentially) happens. However Bankrate’s most recent Economic Indicator Survey shows only a 33 percent chance of a recession.

Do I pay taxes when I sell my house?

If you make a very substantial amount of money on the sale of your home, you may be subject to capital gains taxes. The exact tax rate you’ll pay is impacted by various factors, including how much of a profit you make, how long you’ve owned the home, your marital status and more. You’ll also have to pay any outstanding property taxes still owed at the time of sale, and many states have a real estate transfer tax that may be owed as well.



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